Small business out of touch with consumers, Telstra research shows

It took a while for Jen Geale to realise she was focusing on the wrong things in the bike store she owned.

"The bike shop had a website and we'd put various levels of effort into its ecommerce functionality over the years – but often we just got so distracted and felt the pressure of customers literally standing in front of us, so the website would take a back seat," she says.

Geale changed tack and launched an online store, Mountain Bikes Direct, in 2012, which now turns over more than $2 million a year.

"Once we really started cranking up Mountain Bikes Direct and its website-only model, we realised we had missed an opportunity with the other store to put more effort into online," she says.

Mind the gap

Advertisement

There's a wide gap between what customers say they want and what businesses think they want, according to a study by Telstra published on Friday to mark the relaunch of the Telstra Business Awards.

The Telstra Small Business Intelligence Report is based on two parallel surveys conducted in November of over 1000 small businesses and over 1000 consumers.

The report found small businesses underestimate the importance of being online.

Of those surveyed 62 per cent of customers will stop considering a business if it is not listed online, while only 50 per cent of small businesses surveyed have a website.

Search is also under-utilised by small business with 83 per cent of customers saying search is "important" or "very important" when finding or considering a business but 52 per cent of businesses have no intention of using search engine optimisation.

Word of mouth continues to be important for small businesses, but for many customers this has moved online.

While 76 per cent of small businesses surveyed stressed the importance of word-of-mouth referrals above all other forms of marketing, customers also ranked word of mouth highly at 71 per cent, but it came in third behind online search and online reviews.

Meanwhile some businesses may be wasting time and resources trying to offer a 24/7 service which did not rank highly with customers.

What's holding small business back

Brendan Donohoe, executive director of small business at Telstra, says the research shows a difference between customer behaviours and wants on one side and what small businesses are delivering on the other.

"Our research shows that even when there is a clear appetite among small businesses to embrace digital technology and innovation, there are clear factors stopping them from doing so," he says. "Among the top reasons holding them back are perceptions of the cost, time, effort and resource required, they identify it as a future need but not a current priority and for some, particularly smaller business, they feel they don't understand technology and aren't sure where to start."

Donohoe says small businesses need to be supported to bridge the gap.

"We know that support and trusted advice plays a key role in helping small businesses take hold of the opportunities technology can provide," he says. "Giving them confidence to make changes to the way they operate."

Jen Geale is sympathetic to small businesses which are struggling to keep up with changing customer demands.

"When you're a small business, you can often feel overwhelmed by all the things you have to do yourself – and just focus on the urgent stuff right in front of you – without getting a chance to think about new opportunities," she says.